Senate, House may take different tax-cut paths

Published 2:40 pm, Tuesday, March 17, 2015

AUSTIN -- Senate budget writers blessed more than $4.6 billion worth of tax cuts Tuesday that would save the average homeowner an estimated $206 the first year in school property taxes.

The package, backed by Lt. Gov. Dan Patrick, also would cut the state business tax rate by 15 percent and exempt more companies from the levy.

"We are benefitting from a healthy economy and I want to give some of that money back," said Senate Finance Committee Chair Jane Nelson, R-Flower Mound. Sen. Paul Bettencourt, R-Houston, said the proposal, which would change the calculation of the homestead exemption, would save the average homeowner $206 the first year and $233 the following year.

Senate Finance Committee approval of the package came over objections from some senators who said it's premature to cut taxes when they aren't sure how the state will meet needs in areas including transportation.

The next stop for the package is the full Senate, and then consideration by the Texas House.

House leaders, meanwhile, are taking a strong look at sales tax relief rather than property tax relief. They also are looking at a business tax cut.

Rep. Dennis Bonnen, who heads the tax-writing House Ways and Means Committee, pointed out that the sales tax is one controlled by the state while property taxes are levied at the local level.

That makes it more difficult for state officials to control property tax revenues, said Bonnen, R-Angleton.

"At the end of the day the Legislature should do what we're responsible and control of and we should allow our local officials to do their job," Bonnen said in an interview, adding that local officials face voters just as state officials do.

"The information we're starting to see shows that cutting the sales tax, cutting the franchise tax, drives economic growth far more than cutting the property tax," Bonnen said. "And those also are taxes that we control."

House Speaker Joe Straus, R-San Antonio, said in an interview, "I don't think there has been an approach yet that we've all coalesced around, but in general, tax relief is a priority and the details will be filled in in the weeks and months to come."